DaimlerChrysler reported yesterday that it has halted plans to open a $96 million Mercedes plant in Russia, after an agreement between them and the Russian government could not be reached.  According to a DaimlerChrysler spokesman, "Conditions for local assembly of Mercedes-Benz cars in Russia are not in place at the moment."

Sources close to the matter claim a dispute between Russia's industry ministry and economy ministry is to blame. Although the industry ministry welcomed DaimlerChrysler's plans for the new plant, the economy ministry preferred to protect Russian automakers from outside competition.

Despite the disagreement, DaimlerChrysler added that it is willing to re-open the negotiation talks, once certain unspecified issues have been resolved.

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